HQ 0087074 - Electric Generating Set; Gas Turbine and Electric Generator Imported Together - United States International Trade Commision Rulings

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HQ 087074

NOVEMBER 21 1991

CLA-2:CO:R:C:M 087074 JAS

CATEGORY: CLASSIFICATION

TARIFF NO.: 8502.30.0000; 8503.00.6060, HTSUSA

Patrick D. Gill, Esq.
Rode & Qualey
295 Madison Avenue
New York, N.Y. 10017

RE: Electric Generating Set; Gas Turbine and Electric Generator Imported Together

Dear Mr. Gill:

In your letter of February 15, 1990, as supplemented, on behalf of Siemens Power Corporation (formerly Utility Power Corporation), Bradenton, Florida, you inquire as to the tariff classification of a gas turbine and electric generator imported together from Germany. Our ruling follows.

FACTS:

The machine in question is the Kraftwerk Union 60 Hz model V84 gas turbine-generator. It is described as a single shaft (3600 rpm), single casing machine consisting of one 17-stage compressor and one four-stage turbine. Both components will be imported in the same shipment. Two large silo-type multi- burner combustion chambers suitable for burning natural gas, light or heavy oils, and fuel oils will be imported separately and flange-mounted to each side of the turbine. The compressed air and fuel mixture from these chambers causes the turbine blades to turn, thus creating rotating mechanical energy, which the generator, by means of electromagnetic induction, converts to alternating current electrical energy.

You state that the V84 is designed and uniquely matched as a functional unit whose sole purpose is to generate electricity. It is a combination of a generator and its prime mover, the turbine, which are connected by coupling the shafts, designed and mounted together as one unit. The units are rated almost one-to-one in terms of kW output between turbine and generator. Moreover, the turbine and generator are connected by piping which provides lubrication to the thrust and journal bearings, fuel, and water for emission control. The
lubrication system includes one common operating pump, filter, and cooling system. Both the turbine and generator are controlled by a common control system that receives electronic signals from both units to compute and govern the actual output.

For these reasons, you maintain the turbine-generator combination is classifiable under the provision for other generating sets, in subheading 8502.30.0000, Harmonized Tariff Schedule of the United States Annotated (HTSUSA). You maintain the exhaust stack would be classifiable in subheading 8503.00. 6060, HTSUSA, a provision for parts solely or principally used with a machine of heading 8502.

ISSUE:

Whether the turbine and generator imported together are classifiable together as a set, or are separately classifiable.

LAW AND ANALYSIS:

Merchandise is classifiable under the HTSUSA in accordance with the General Rules of Interpretation (GRIs). GRI 1, HTSUSA, states in part that for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes and, provided the headings or notes do not otherwise require, according to GRIs 2 through 6.

The Explanatory Notes (ENs) constitute the Customs Cooperation Council's official interpretation of the Harmonized System. While not legally binding, they provide a commentary on the scope of each heading of the Harmonized System, and are thus useful in ascertaining classification under the System. Customs believes they should always be consulted. See T.D. 89- 80.

Relevant ENs indicate that for purposes of heading 8502 the expression "generating sets" applies to the combination of an electric generator and any prime mover other than an electric motor and that generating sets consisting of the generator and its prime mover, which are mounted (or designed to be mounted) together as one unit or on a common base (see the General Explanatory Note to Section XVI), are classified [in heading 85.02] provided they are presented together.

Turbines and generators of this type are stand-alone machines with their shafts being typically connected either by means of a gear box or a flange. The instant units are
connected by means of couplings on their respective shafts which are bolted together to form the single shaft referred to in the literature. The coupling between turbine and generator is a precision mechanical fit designed to insure that both shafts rotate at identical speeds. The design of these units is such that in addition to shaft rotation, their vibrational behavior, bearing loads, etc., must be matched. Moreover, the generator, in this case, is used as a motor to start the turbine. The gas turbine cannot be started or operated by any means other than its matching generator.

It has been suggested that the cited General Explanatory Note may support the proposition that there must be substantial physical integration of the turbine and generator for these units to constitute a set for tariff purposes, and that a mere coupling of the shafts is insufficient in this regard. In our opinion, the note is inconclusive in imposing this requirement on the turbine and generator in issue here and, in any event, there is substantially more integration of these units than a mere coupling of the shafts. This note, therefore, should not be interpreted in such a way as to contravene the otherwise clear scope of heading 8502.

Because the units in issue here are commonly bought and sold together, are commercially regarded as generating sets, and possess design features that indicate they will be permanently attached to one another, we conclude that they are designed to be mounted together as one unit for purposes of heading 8502.

HOLDING:

Under the authority of GRI 1, the turbine and generator which comprise the Kraftwerk Union model V84 are provided for in heading 8502. Actual classification is under the provision for other generating sets in subheading 8502.30.0000, HTSUSA. The rate of duty is 3 percent ad valorem.

Sincerely,

John Durant, Director
Commercial Rulings Division

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